S&P downgrades Longfor

S&P said it lowered its ratings for Longfor Group Holdings Ltd. and its senior unsecured notes to BBB- from BBB and to BB+ from BBB-, respectively.

“We lowered the rating to reflect potential weakening comparative business strengths for Longfor on the back of the resignation of Madam Wu. Madam Wu has resigned as executive director and chairperson of the board. The surprising move has weakened investors' confidence, as indicated by the company's onshore and offshore bond prices trading materially below par. Moreover, this move comes amid a deep industry downturn. Many private developers have defaulted since the second half of 2021, a trend that has effectively shut down both onshore and offshore bond markets,” S&P said in a press release.

However, the agency noted Longfor has sufficient cash on hand to cover its short-term debt obligations until the end of 2023.

The outlook is negative.

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